Prosecutors said on Wednesday that Ticketmaster had agreed to pay a $10 million fine to resolve its allegations of hacking into the computer system of one of its competitors, thus ending the years of legal battle over allegations that the company illegally interfered in the ticketing business, called Songkick.
More than two years ago, Ticketmaster and Songkick reached a settlement in response to a lawsuit that accused the concert giant of abusing its market power to control ticket sales. In addition to the $110 million settlement, Ticketmaster also acquired part of Songkick’s remaining technical assets and patents at an undisclosed price.
The prosecutors of the United States Attorney’s Office for the Eastern District of New York stated in court documents that the computer intrusion was led by a former employee of Songkick, who left the startup in 2012 and later started working for Ticketmaster under Live Nation. The document stated that the employee was said to have disseminated Songkick’s login information to other Ticketmaster employees so that they could access an application called Artist Toolbox, which provides data on the purchase of pre-sale tickets through Songkick.
The employee was also accused of sharing the URL that led to the draft of the Songkick ticketing webpage. The prosecutor said that in response to this information, an executive of Ticketmaster wrote that the goal was to “strangle” a competitor and “steal” one of Songkick’s main customers.
According to a press release from the U.S. Attorney’s Office, details of the criminal investigation were revealed in a federal court in Brooklyn, and Ticketmaster formally agreed to pay the fine on Wednesday as part of an agreement to defer prosecution.
Ticketmaster said in a statement on Wednesday that in 2017, the company terminated the work of the employee who provided login information and another Ticketmaster employee, Zeeshan Zaidi, who also accessed the computer system and faced separate charges.
The statement said: “Their actions violated our company policy and are inconsistent with our values.” “We are glad that this issue has now been resolved.”
Last year, Mr. Zaidi, who was the head of Ticketmaster’s artist service department, pleaded guilty to conspiracy to commit computer intrusion and wire fraud in the case. Court documents from the U.S. Attorney’s Office show that Mr. Zaidi visited Songkick’s computer system “multiple times” between 2013 and 2015. Mr. Zaidi also included screenshots of Songkick’s artist toolbox in the executive presentation for executives to use, and solicited relevant documents saying that the employee who worked there was Song Ki.
The lawyer for Mr. Zaidi, who is awaiting the verdict, did not immediately respond to a request for comment.
The criminal charges filed against Ticketmaster on Wednesday included one count of hacking a computer for commercial purposes and one count of wire fraud. In order to comply with the deferred prosecution agreement, Ticketmaster must maintain an ethics program to prevent similar violations in the future.
For a multi-billion-dollar company, the $10 million fine is not a huge sum, but the epidemic has already put huge financial pressure on Live Nation. Live Nation must cancel concerts and deal with a large number of concerts. Refund request.